Sensex, Nifty end flat; metals shine, banks fall further
06 April 2016
3:30 pm Market Closing: Equity benchmarks ended flat after seeing a 2 percent fall in previous session. The Sensex rose 17.04 points to 24900.63 and the Nifty advanced 11.15 points to 7614.35.
About two shares advanced for every share declining on Bombay Stock Exchange.
Auto, infra, metals, telecom and pharma stocks supported the market while banks stocks extended fall.
Tata Steel and Hindalco rallied 5 percent followed by Tata Motors, L&T, Lupin, Sun Pharma and Bharti Airtel with 1-2 percent upside while Infosys, ICICI Bank, Axis Bank and Adani Ports fell over 1 percent.
2:40 pm CLSA on Exide: CLSA initiated coverage with a sell rating on Exide Industries and target price of Rs 120 apiece, citing weak demand, margin pressures and expensive valuations. The stock declined 3.6 percent intraday Wednesday.
The brokerage expects muted 4 percent earnings CAGR (compound annual growth rate) over the next two years.
It says the automobile battery manufacturer faces a weak demand outlook as 4W (four-wheeler) replacement and inverter segments, which together contribute 52 percent of its FY16 revenue and 66 percent of its EBITDA (earnings before interest, tax, depreciation and amortisation), should see slower growth over the next 2 years.
Competition in higher-margin inverters will also rise with Amara Raja setting up new capacity, CLSA feels.
After a lead-price-driven margin expansion in FY16, the brokerage sees headwinds from a weakening product mix and rising competition in inverters.
2:20 pm Rate cut transmission: A day after the Reserve Bank cut policy rate by 0.25 percent, Deputy Governor S S Mundra today expressed hope that transmission of lower interest rate through banks will be more effective this time.
RBI cut benchmark lending rate yesterday to 6.5 percent, lowest in the last 5 years.
"There is a holistic view this time, there is a rate cut, there is liquidity framework, and Marginal Cost of Funds based Lending Rate (MCLR) has also become operational from April 1.
We are quite confident that with combination of all these factors transmission would be much more effective," he said on the sidelines of an Assocham event here.
2:00 pm Market Check
The market continued to be in tight range as after RBI policy, investors are waiting for fourth quarter earnings season that will kicked off next week.
The 30-share BSE Sensex fell 23.79 points to 24859.80 and the 50-share NSE Nifty declined 1.80 points to 7601.40 while the market breadth remained strong as about 1440 shares advanced against 943 declining shares on Bombay Stock Exchange.
Infosys, ICICI Bank, Axis Bank and Adani Ports were biggest losers on Sensex, down 1-2 percent while Tata Motors, Tata Steel, Hindalco Industries and Bharti Airtel gained 1-6 percent.
1:20 pm Fund raising: Indian companies raised a record Rs 4.6 lakh crore in 2015-16 through private placement of corporate bonds to meet business needs - a surge of 13 percent over the preceding fiscal.
According to latest data available with Securities and Exchange Board of India (Sebi), firms raked in Rs 4,58,073 crore last fiscal, which ended on March 31, through private placement of corporate bonds.
It was higher than Rs 4,04,136 crore garnered in 2014-15.
In terms of numbers, 2,975 issuances were made last fiscal, as compared to 2,611 in 2014-15. These funds have been raised mainly for expansion of business plans and to support working capital requirements.
1:00 pm Market Check: The market remained choppy in afternoon trade with the Sensex moving in a tight range below 25000. Metals stocks topped buying list today with Tata Steel and Hindalco Industries gaining more than 5 percent.
The 30-share BSE Sensex climbed 45.66 points to 24929.25 and the 50-share NSE Nifty rose 19.20 points to 7622.40. Advance:decline ratio continued to be positive as about two shares gained for every share falling on Bombay Stock Exchange.
Tata Motors launched Tiago, which will compete with Maruti Celerio and Hyundai i10. It will be available in five models across petrol and diesel variants. Its petrol variant will start at Rs 3.2 lakh (ex-Delhi).
12:25 pm Unitech in News: Life Insurance Corporation (LIC) is all ready to auction Unitech 's mortgaged asset to recover outstanding dues of Rs 184 crore, sources tell CNBC-TV18.
LIC will e-auction Unitech's 14 lakh square meter of land in Noida on May 6. The reserve price for the auction has been set at Rs 2,660 crore, sources say.
LIC has taken possession of the property as per the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFESI) Act.
CNBC-TV18, quoting sources, says that Unitech is likely to approach court to get a stay order against the e-auction. The company is also in talks with some investors to take over the loan, sources add.
12:00 pm Market Check
The market continued to be volatile in noon trade. Equity benchmarks as well broader indices were marginally in the green.
The 30-share BSE Sensex rose 61.42 points to 24945.01 and the 50-share NSE Nifty advanced 23.85 points to 7627.05. The BSE Midcap and Smallcap indices gained 0.14 percent and 0.5 percent, respectively.
The market breadth continued to be positive as about two shares advanced for every share declining on Bombay Stock Exchange.
Meanwhile, the Reserve Bank of India (RBI) moves to ease interest rates and at the same time improve liquidity to help borrowers benefits from low rates could be a game changer for the economy, says Adrian Mowat, MD - Chief Asian and EM Equity Strategist at JP Morgan. The RBI, in its monetary policy meet on Tuesday announced a series of measures to improve liquidity in the banking system, so that banks pass on the benefits of lower rates to its customers.
Force Motors, SpiceJet, Tata Steel, Jet Airways, ICICI Bank, SBI and Yes Bank were most active shares on exchanges.
11:25 am FII View: Global markets continue to be range-bound driven by concerns like rate hike by the Federal Reserve, China's economy and global growth concerns, says Michael Strobaek, Global CIO & Head - Asset Management at Credit Suisse.
Speaking from sidelines of the 19th Annual Credit Suisse Investment Conference, Strobaek says that the Federal Reserve, unfortunately, made a mistake by not moving faster and earlier on rate hikes.
He expects two more hikes over coming months.
Discussing India, Strobaek says that India has a better footing in terms of growth outlook in comparison to China.
11:00 am Market Check
Equity benchmarks continued to be rangebound with the Nifty hovering around 7600 level after sharp sell-off seen in previous session. Metals, auto, telecom and pharma stocks gained while banks stocks declined.
The 30-share BSE Sensex declined 5.52 points to 24878.07 and the 50-share NSE Nifty rose 3.65 points to 7606.85. The market breadth remained strong as about 1232 shares advanced against 795 declining shares on BSE.
Tata Steel gained nearly 3 percent as the company is likely to announce sale of Scunthorpe Unit to Greybull soon. It is also in advance talks with Thyssenkrupp for a 50:50 JV.
Exide Industries declined over a percent after CLSA initiated sell rating on the stock with a target price of Rs 120 apiece. Bharat Forge lost nearly 5 percent as North American Class 8 truck orders in March hit lowest level since September 2012. Bank of America Merrill Lynch expects the stock to de-rate owing to muted earnings.
Ashoka Buildcon crashed 20 percent after media reports indicated that office of company in Nashik was raided by the Income Tax department on Tuesday on allegations of favouring the Maharashtra Deputy Chief Minister, Chhagan Bhujbal.
10:45 am FII View: The Reserve Bank of India (RBI) moves to ease interest rates and at the same time improve liquidity to help borrowers benefits from low rates could be a game changer for the economy, says Adrian Mowat, MD - Chief Asian and EM Equity Strategist at JP Morgan.
The RBI, in its monetary policy meet on Tuesday announced a series of measures to improve liquidity in the banking system so that banks pass on the benefits of lower rates to its customers.
Speaking to CNBC-TV18, Mowat says that there has been a degree of momentum building in the capital expenditure cycle. There are expectations of the wholesale inflation turning positive, he adds.
There have been improvements in sectors like automobile and cement. JP Morgan expects a 10 percent increase in cement sales over two months period, he says.
10:25 am Buzzing: Bharat Forge shares fell 5 percent intraday after its North American Class 8 truck orders in March hit lowest level since September 2012.
North American Class 8 Truck orders stood at 15,800 units, degrowth of 37 percent compared to a year-ago period and down 12 percent from preceding month.
Class 8 trucks contributed 20 percent to total revenue of Bharat Forge.
While maintaining underperform with a target price of Rs 650, Bank of America Merrill Lynch expects profit in Q4FY16 to decline 13 percent on yearly basis as as truck orders from the US have been deteriorating.
The brokerage also expects the stock to de-rate owing to muted earnings.
10:00 am Market Check
Equity benchmarks were marginally higher amid volatility in morning trade. The Sensex rose 56.99 points to 24940.58 and the Nifty advanced 21.95 points to 7625.15, led by auto, telecom, metals and pharma stocks.
The broader markets also traded higher with the BSE Midcap and Smallcap indices rising 0.2 percent and 0.5 percent, respectively. About 1102 shares advanced against 559 declining shares on Bombay Stock Exchange.
Tata Motors, Bharti Airtel, Tata Steel, Hindalco Industries, Coal India, BHEL and M&M gained 1-4 percent while HDFC, Wipro and Cipla fell 0.7 percent each.
Asia markets turned higher, shrugging off a global sell-off in equities overnight, as oil prices advanced and activity in China's services sector showed signs of pick-up.
9:35 am Market Update: Equity benchmarks lost opening gains amid choppy trade, dragged by HDFC, Reliance Industries, and technology stocks. The Sensex fell 17.30 points to 24866.29 and the Nifty declined 7.50 points to 7595.70.
However, the market breadth was positive as about 736 shares advanced against 510 declining shares on BSE.
9:31 am FII View: Abhay Laijawala of Deutsche Bank feels the monetary policy yesterday marks the beginning of transition towards second leg of an accommodative monetary stance that started in January 2015.
He says while the earlier leg of this stance focused on policy rate cuts, yesterday's policy marks the beginning of an easing liquidity situation, which had not accompanied the policy rate cuts, so far.
According to him, conscious focus on easing liquidity and articulating that the RBI will now move from a liquidity deficit stance to a liquidity neutral stance is a momentous decision marking the reversal of a 6-year stance.
"This has much greater significance than an optical reduction in policy rates. Hence, we are surprised at the sharp reaction of the equity markets which sold off by almost 2 percent following the policy announcement," Laijawala says.
9:15 am Market Check
The market rebounded on Wednesday after yesterday's sharp sell-off. The 30-share BSE Sensex rose 106.85 points to 24990.44 and the 50-share NSE Nifty climbed 34.85 points to 7638.05.
ICICI Bank, Tata Motors, Lupin, Mahindra & Mahindra, Bharti Airtel, Bajaj Auto, Hero Motocorp, BHEL and Hindalco Industries gained 1-2 percent while Wipro, HDFC, Cipla and NTPC were losers.
The Indian rupee marginally bounced back in early trade after a steep fall in previous session. The currency has opened at 66.42 a dollar, up 4 paise compared to 66.46 a dollar on Tuesday.
US dollar touched 17-month low against the yen on back on growing concerns over the global growth.
Asian markets were mixed with the Shanghai and Hang Seng trading flat with a positive bias. US oil prices bounced back after hitting March 4 lows, up 2.7 percent at USD 36.89 a barrel. Brent rose 1.7 percent to USD 38.52 a barrel.